Countries like Mexico offer a stark contrast. Despite sharing a
border with the U.S. and an economy that is expected to experience
reasonable growth in 2014, Mexican research intensity (R&D as a
share of GDP) has languished below 1% range for some time. The
country’s S&T and academic infrastructures are not well suited to
support a higher level of growth. As a result, based on its current
resources, priorities and national aspirations, Mexico’s prospects for
long-term growth based on innovation are limited. It ranks in the
top 40 R&D-sponsoring nations only because its large GDP, which
is driven by agricultural, materials and lower-technology consumer
products. Mexico is typical of the R&D infrastructure and policy
context in a number of emerging countries, and contrasts with
countries like Finland and Denmark, which spend about the same
absolute amount as Mexico on R&D while having economies about
one tenth the size.

In ROW, Means & Policy Disproportionately Affect R&D

The sustained high rates of R&D growth in China are unusual.
Apart from the historic R&D leaders like the U.S., Japan and Europe, no countries are positioned to match China’s level of commitment. Even South Korea, with its exceptional level of research
intensity, cannot achieve the same scale or rate of growth.

Emerging countries with similar aspirations for innovation-based
growth require a diversity of talent, capabilities and markets—and
the will to invest. With the world’s fourth-largest GDP, India is
a good example. It has significant academic infrastructure, large
population and global connectivity, but social and political priorities
draw investment away from R&D. India’s projected rate of R&D
funding growth in 2014 is only one-fifth that of its anticipated economic growth.

Although difficult to quantify, a lack of willingness or capacity to
invest in R&D could restrain such economies from reaching larger
potential in the long term. And it may become more difficult. According to McKinsey Global Institute analysis, as global economic
growth slows in the future (as it is projected to do), the supply of
capital will fall short of demand by 2030. This is especially important for those among the 74 ROW economies with limited R&D
infrastructures: They could become even more restricted in building
a foundation for R&D in the future than they are now.

In Their Own Words

Comment from the Battelle/R&DMagazine Global Researcher Survey

The globalization of research, finance, production, etc. will
balance world economies in ways not seen ever before to the
advancement of some and the stalling or loss of income of
others. Water and climate extremes will likely be key sources
of world tension that will need addressing through all means
possible including research and technology.